You Can’t Control The Market, You CAN Have an Investment Plan

5 September, 350 years ago…

For three days horrific fires sweep through the city of London. All in all it ravages 13,200 houses, 87 parish churches, and St Paul’s Cathedral. The population of central London (within the city walls) at the time is just 80,000 people.

Estimates are 70,000 are left homeless. No one really knows the death toll. It’s assumed not to be as high as expected. But the poor and middle-class aren’t accounted for. Even still, the fire was so hot there was no way to count bodies; there was nothing left but ashes.

The heat of the blaze was incomprehensible. Archaeologists say it hit 1,250 degrees Celsius.

On Monday 5 September 2016, Laurence Dodds wrote a brilliant piece about The Great Fire in The Telegraph. He steps through the whole event, day-by-day, almost hour-by-hour. His piece opens as he explains,

This is the story of a city on knife’s edge, riven by religious and political tensions, made vulnerable to disaster by its own neglect and avarice. It is a story of official blunders which turned a minor, commonplace accident into an all-consuming conflagration. It’s a story of chaos, mass hysteria, profiteering and racist violence — but it is also a story of some heroism and charity, from royal and commoner alike.’

Sounds incredibly familiar…

Dodds continues as he writes about the second day of the fire,

The xenophobic backlash noted yesterday is getting worse. “Monday morning,” writes the Earl of Clarendon, “produced first a jealousy & then a universal conclusion, that this fire came not by chance.”

‘The French and the Dutch are primary suspects due to the ongoing war, but it could also be Catholics — perhaps even the Jesuits. The government takes no chances, ordering an embargo on anyone leaving the country via Gravesend or Dover.’

Furthermore, a Dutchman was mobbed. His saving grace is the King’s brother, who happens to ride past. The xenophobia continues hour by hour. Random foreigners continue to fill the gaols.

The assumption is one of them started the fire. May as well lock them all up.

The fires continued until Tuesday, when the wind died and firebreaks begin to work. Eventually the fire burnt itself out. But the worst of the xenophobia came after London has burnt to the ground.

In the final parts, Dodds finishes by saying, ‘The domestic refugee crisis and the rebuilding of London dominate politics for the next few years.

Again, sounds incredibly familiar…

Is the fire still raging?

Today the chance of a great fire razing London to ashes is remote. In fact it’s probably impossible. Today the construction of buildings means mass fire would barely jump a street, let alone across a city.

And of course we have firefighters. They didn’t even exist in 1666.

But what if there is a fire burning today? Just not a literal one.

I think there is. I think it’s underway, and there’s little we can do to stop it. It will end, it will burn itself out. But it will leave damage. The only question is how much damage will it do to you?

The fire I talk about now is an economic one. The foundations of it are deep in the global financial system. It’s actually been going for a while, thanks to poor government planning and bungled fiscal policy.

The economic fire that rages is similar to that of 350 years ago. Its by product is fear, panic and a big dose of xenophobia.

In looking for the arsonists, foreigners are viewed as criminals. The assumption is if they’re not from these parts then they’re a suspect. Guilty until proven innocent.

The parallels between the reactions to The Great Fire of 1666 to The Great Economic Fire of 2016 are uncanny.

Right now it’s fair to say the current economic fire isn’t about to burn itself out just yet. It has some time to run.

Governments are trying to put it out. They are getting everything they can get together, trying to save their house. Unfortunately none of it is working.

Attempts to ‘ring fence’ the blaze are futile. The ability to use monetary policy is weak. It’s like trying to use buckets to put out a 1,250-degree fire.

Will there be anything that can stop this economic fire? Perhaps not. Perhaps this will simply burn. Burn until there’s nothing left to burn anymore. At that point the devastation will be obvious.

But you can fight the fire. Don’t rely on the government to help you out. They can’t protect their own house. What makes you think they’ll protect yours?

That involves a few simple rules of engagement.

Control what you can control

First and foremost recognise that some things are out of your control. You don’t decide rates, stimulus packages, or when a country decides to run a drone strike on another.

Second, get the basics of investment sorted: diversify, have a plan, set goals, and keep things simple. These ‘basics’ can go a long way to protecting yourself. Simple rules like managing your allocations to equities, property, cash and fixed interest can help ring fence your own financials.

Look for opportunity to douse any blaze that might get close. This can come in the form of investment opportunities. Typically short term investment opportunities. These can add to your safety net before things get too heated. Read more about that here.

But also think about having a strategy in place in advance to insulate you from a potential crash. My colleague Vern Gowdie is the foremost authority I can recommend for more on that. You can read about his plan to protect you from a raging economic fire here.

Perhaps most important of all, understand your own capabilities and limitations. You have to know your own ability to invest and protect your money.

You don’t have to buy in to the fear and uncertainty that slams you on a daily basis. Yes, things aren’t great. Yes, there might be a global economic fire, but there are pockets of safety. These safe zones that can help you keep things under control, and keep the fire from burning your financials to the ground.


Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’ opportunities that are often shunned by those in the financial services industry.

If you’d like to learn about the specific investments Sam is recommending in either small-cap stocks or cryptocurrencies, take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here, or a 30-day trial of his industry leading cryptocurrency service, Sam Volkering’s Secret Crypto Network here.

But that’s not where Sam’s talents end. Sam specialises in finding new, cutting edge tech and translating that research into how the future will look — and where the opportunities lie. It’s his job to trawl the world to find, analyse, research and recommend investments in the world’s most revolutionary companies.

He recommends the best ones he finds in his premium investment service, Revolutionary Tech Investor. Sam goes to the lengths of the globe and works 24/7 to get these opportunities to you before the mainstream catches on. Click here to take a 30-day no-obligation trial of Revolutionary Tech Investor today.

Websites and financial e-letters Sam writes for:

Money Morning Australia